Split council agrees to pay state millions to keep RDA

City hopes for favorable decision from State Supreme Court on legality of take

POSTEDOctober 25, 2011 9:56 p.m.

A split Turlock City Council on Tuesday took the next step toward paying the State of California $2.46 million to retain the city's redevelopment agency — a payment the majority of council still hopes the city won't have to make, given ongoing legal action.

The "voluntary" RDA measure, approved by the state legislature in July as part of a balanced budget package, forces cities statewide to either shut down their redevelopment agencies — organizations which collect a share of property tax money and spend it to reduce blight — or pay a large, one-time fee to the state, followed by annual payments. Turlock's fee has been calculated at $2.46 million, plus a further $615,000 annual payment.

Should Turlock make the payment, the agency would remain able to fund some Turlock staff and some future housing projects. But the payment would deplete all existing non-housing funds from the agency, and would require more than half of the agency's annual income be returned to the state.

The pay-or-don't decision becomes more complicated by the State Supreme Court, which recently decided to hear an appeal of the law. The California Redevelopment Association argues that the “voluntary” payments are illegal under 2010’s Proposition 22, a constitutional amendment which explicitly prohibits “seizing, diverting, shifting, borrowing, transferring, suspending, or otherwise taking or interfering with” revenue dedicated to local government, including redevelopment dollars.

The court stayed aspects of the law while it decides the case, but it remains unclear how the court will treat the law's passed deadlines should the appeal fail and the law continue.

"Because we're in an area where we're unsure about what's going to happen, we believe we ought to put ourselves in the best position possible," said City Attorney Phaedra Norton.

Tuesday's action, which states Turlock will comply with making the payment but does not legally bind Turlock to do so given the tenuous legal situation, drew concerns from Vice Mayor Amy Bublak and Councilman Bill DeHart. Both voted against the measure, with DeHart comparing the state's actions to extortion.

"It's kind of like loading a gun and holding it to your head," DeHart said. "I'm uncomfortable putting ourselves in a position where we are prepared to pull the trigger."

Bublak and DeHart have both voted in opposition to the state move at every opportunity.

Mayor John Lazar and council members Mary Jackson and Forrest White voted to move forward with the action, as recommended by Turlock's legal counsel.

While White took exception with the notion of actually making the payment, he classified the action as a required step to protect the city. The city may yet opt out of retaining its redevelopment agency, should the Supreme Court side with the State of California when it issues its decision, expected in mid-January.

"At that point in time, we will have to make a choice," White said. "... We just continue to play the game."

Jackson played the optimist at Tuesday's meeting, hoping the Supreme Court agrees with the League of California Cities and overturns the California law. Such an action would take the decision out of Turlock's hands, leaving the city with both its redevelopment agency and $2.46 million.

"I'm going to put my faith in the California Supreme Court," Jackson said, "and they're going to decide with the will of the people."